Medicare Supplements: What is the Deal with Rate Increases?
Those considering enrolling with a Medicare supplement and those already enrolled worry about rate increase. Rate increases can seem consuming, confounding, and confusing. If you are looking for a guide to explain the who, what, when, where, and why of Medigap rate increases, then you have come to the right place! Read on….
Most Medigap providing companies have a twelve-month rate lock-in period in which their new clients can not experience a rate increase. However, once that twelve-month period is over and rate increases start occurring, many are perplexed as to why. In most cases, the why of rate increases can be explained by one or more of the below causes:
The Post 12-month administrative rule: If a rate increase goes into effect during the first 12-month period the client owns a policy, the rate increase will occur for that client at the first premium payment date after the twelve-month period is up.
Consecutive annual rate adjustments: This is when there are consecutive rate increases during the first two years an individual is covered by a given policy. In this case, both rate increases happen at once.
Attained age: For policyholders in attained-age states, the premium payment amount goes up each year on the first policy payment date. However, if an attained age rate increase and an annual rate adjustment take place two months in a row, the later increase will go into effect three months after the first.
Please be aware that insurance premiums increase due to rising health care costs (caused by inflation) as well as increases in Medicare’s deductibles and copayments (which increase each year.) No one enrollee of a Medicare supplement policy is singled out for a rate increase.
For more information on Medigap, Medicare, and all other associated plans, you should do your research. Be prepared and comfortable with the information so that you are completely comfortable with the plan you purchase and are not caught off guard by its processes.
Want to find out more about Medigap, then visit Richard Cantu’s site on how to choose the best plan for your needs.
